Financial news

Trading during the first day of the week at the Malta Stock Exchange was relatively muted with the index remaining steady at 3235 points. Activity in the equity market resulted in 16 deals struck in four different listings.

Bank of Valletta was the session's sole gainer as the equity increased by a mere one-tenth of a cent which was enough to reclaim the psychological important level of €3. The equity traded at an intra-day low of €2.98, but buying activity pushed the price back up to its present reading. The financial services company was also the day's most liquid and actively traded equity as investors swapped a total of 4,160 shares over nine deals.

HSBC Bank Malta was a non-mover during yesterday's session as the equity closed unchanged at €2.98 despite trading at an intra-day high of €2.99 when investors deemed the price too high and pushed the equity back to its current price. Trading activity was spread over a total of three deals for a market consideration of €9,245. The bank reported last Friday a drop of 25 per cent in pre-tax profit for the first six months of the year and declared a gross interim dividend of €0.077.

Similarly, FIMBank also remained static during the day as the equity closed unchanged at $1.29 albeit on low volume as two investors transacted just 700 shares.

Go was the only non-banking equity to be active during the session even though it did not impact the index as it registered no change in price, ending the day at €1.75. Investors in the quadruple play communications' company exchanged 3,610 shares over three deals for a market value of €6,317.

In the fixed interest sector of the market, activity was spread over five government stocks and eight corporate bonds. The best performer in the corporate debt market was the 5.6 per cent GlobalCapital 2014/16 which increase by 250 ticks as €16,200 nominal were transacted over three deals to terminate at €84.5. Similarly, the 4.6 per cent HSBC Bank Malta 2017 was also a gainer as it edged up by 35 ticks to close at €100.85.

In the sovereign debt market the highest turnover was registered in the 5.7% MGS 2012(III) as investors exchanged €93,176 nominal over two deals increasing in the process by 14 ticks, to end the session at €108.14. The 5.5% MGS 2023(I) was nevertheless the day's gainer as it rose by 76 ticks when two investors swapped €4,659 shares to close the session at €106.74.

The week ahead - Economic indicators for week starting August 3

The economic schedule for the week ahead will focus primarily on the monetary decisions of the European Central Bank and the Bank of England which will both convene on Thursday.

In the United States, the number of sales of existing homes should show a marked increase of 0.6 per cent from its prior 0.1 per cent. Meanwhile, unemployment is anticipated to edge higher to reach the 9.6 per cent level from its current 9.5 per cent, while non-farm payrolls are expected to fall 325k in July, bringing total job losses to over 6.4 million since January 2008.

On the other side of the Atlantic, the European Central Bank meeting on Thursday is expected to remain firmly on hold as it takes comfort from the steady improvement in sentiment surveys. The Purchasing Producers' Index is expected to dip further into negative territory, declining by -6.6 per cent year-on-year from its previous -5.8 per cent. Meanwhile, retail sales are expected to register a positive performance as consensus expects an increase of 0.3 per cent month-on-month from a negative -0.4 per cent.

In the UK, the Bank of England meeting on Thursday is expected to reconfirm the current rates of interest while increasing its quantitative easing by another £25 billion. The week will also provide some salient economic data with positive expectations in the nationwide consumer confidence which consensus expects an increase of 59 from a previous reading of 58. The Purchasing Managers' Index for services is also expected to increase to a reading of 51.8 from its previous 51.6. Meanwhile, there are positive expectations in both the manufacturing and industrial production sector.

This article has been prepared by Bank of Valletta p.l.c. (the Bank), which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the Bank to acquire or sell securities. Nor does it constitute any form of advice by the Bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.